Business with earnings from abroad have not felt the pinch but for UK based companies, savers and the pound in general it has not been a good year.
UK based firms companies and consumers in Britain experienced the biggest loss one year after the shocking vote for Brexit which saw the value of the pound drop to the lowest mark in more than 3 decades.
During EU’s referendum first year anniversary, Hargreaves Lansdown, a financial services firm stated that there was emergence of clear losers and winners, with the pound being affected the most in the trade. In the list of winners are blue chip firms with large investments from abroad.
The pound took the hit on June 24 when the outcome of the referendum was announced and it is still at its lowest, 15% one year later against the dollar with just £1.26 more. It also reduced to 14% compared to the euro by £1.13.
With the pound being this weak, UK holidaymakers overseas have no spending power and there is pressure on consumer funds by raising the inflation to a 2.9% four-year high.
According to a senior analyst at Hargreaves Lansdown, Laith Khalaf, the pound has experienced the most effect of Brexit. Visitors are the biggest losers from Brexit so far even though the regular consumers are feeling the pressure from the rising inflation.
Some UK based firms have also felt the effect of the drop in the pound and the more tough conditions for local finances. According to Hargreaves Lansdown, the FTSE 100 was up 18% in the last one year, but UK based shops like
Next and Dixons Carphone still experienced huge loses with shares falling to 27% and 29% respectively.
Due to a combination of rising inflation and low interest rates, cash savers have also been termed as Brexit losers.
Khalaf noted that recovering the inflation is making the low interest rate be more harsh an environment for cash investors since the power of their money is becoming weak very fast.
The Brexit referendum seemed to damage the thought of the Bank of England will raise the cost of borrowing with trade projections of an increment by 2018 falling from 86% from the voting day to the current 20%.
Brexit negotiations have begun this week and the TUC stated that the government had failed in making the Brexit a benefit to the working class, one year after the referendum.
TUC has for the last one year fought for the best Brexit outcome for the working class in a way it would protect their rights at work and their jobs.
It would be a crashing move for the UK economy and the job market to have a no-deal Brexit, since the prime minister has no power over it after voting outcome.
A tariff-free and barrier-free trade with Europe and an equal playing field for the rights of employees is a good Brexit agreement. The current rights must be protected by the deal and also ensuring that diligent citizens aren’t left out of future advanced protection rights provided for EU employees.
Owing to a weak pound, multimillion firms on the FTSE100 with overseas income are in the biggest winners section from the referendum.
The best performing firms in the stocks market have overseas income which has helped in stabilizing their stock price. Other factors for top performing stocks include increase in commodity production for companies such as Glencore and Antofagasta.
The top 10 firms in the FTSE 100 have continued to lead since the referendum, accounting for 46%ofthe leading index.
Other global stocks trade has fared well in the last year. For instance, every £100 invested last year in Germany’s DAX is £114 compared to £123for the FTSE 100.
